Russia's role in the world, today and tomorrow

16-18 November 2017

A Note by the Director

2017/09

EXECUTIVE SUMMARY

Context and why this was important
Russia still matters, most of all for Europe. We are in a hole and we are still digging. There is a risk things could get much worse. The hotline habit of talking through problems and crises is fading. Russia is thinking of its role in the world with regard to China as much as to the West. It is not yet clear if this is a strategic shift.

People
Ambassador William Burns chaired a formidable group of experienced diplomats, analysts, writers and business leaders from both Russia and the West.

Analysis
Russia yearns to be integrated into a great power system but defines a great power as one that makes its own rules. Russians appear willing to pay a significant tax for great power status. Russia’s ambitions outstrip its resources but they do not outstrip its stubbornness and resilience. Sanctions are hurting but not necessarily working. There was close to consensus that, as long as Putin is in power, Russia is more stable than it looks. Bold economic reform is needed but unlikely. The capacity for dynamic innovation is weak but growth of around two percent per annum should be sufficient to contain dissatisfaction.

Ideas for action and reflections

We should be realistic because to be too ambitious in design for rapprochement with Russia could be downright dangerous. There is too little alignment of interests. And there are nuclear weapons and an ageing system of deterrence. What we need therefore is a series of processes in train – Track Two talks as well as official negotiations – that can de-escalate tension and mitigate risk. These initiatives need to sustain an appetite for discussion and keep open hotlines for crises.

The West needs to regain its confidence, both in its values and in the results they bring on innovation, prosperity and power. Its job is not to impose those values on others but to make them irresistible by their manifest success.

Arms control and cyber: official and Track Two discussions on arms control and modern deterrence (on which Ditchley will hold a conference in early 2019) are urgently needed. The frameworks need updating to take account of the impact of new technologies, e.g. cyber, and weapons and their potentially dangerous interaction with the ageing system of nuclear deterrence.

Syria and CT: there could be common ground in containing mass migration through safe zones inside Syria and in selective local humanitarian ceasefires. It looks like there could be some alignment between Russian and western interests now that ISIS has been geographically defeated. A dominant Iran is in no one’s interests. There will be a need for CT cooperation on events like the World Cup in Qatar, which could open doors.

Ukraine: Ukraine remains the “big boulder in the road”. Crimea could, and would have to be, shelved indefinitely for there to be any progress. We should look for concrete measures on the ground to defuse tensions and reduce violence. Prisoner exchanges could be a good place to start along with local ceasefires and humanitarian initiatives. Any talks are better than no talks.

Sanctions: like President Putin, they are here to stay for the foreseeable future and a feature of the landscape that has to be traversed. The focus should be on keeping things from getting worse, which they easily could. President Trump’s room for political manoeuvre on Russia is close to zero.

FULL REPORT

Context and why this was important now
Russia still matters, most of all for Europe. A jolting breakdown of trust between Russia and the West has left relations in arguably a worse state than during the Cold War. The rise of China and a palpable loss of confidence in the West have eroded the gravitational pull of the West on Russia. We are in a hole and we are still digging. There is a risk things could get much worse. The hotline habit of talking through problems and crises is fading. We need to be realistic but not fatalistic. This felt the right moment to take stock and to test assumptions.

People
Ambassador William Burns chaired a formidable group of experienced diplomats, analysts, writers and business leaders from both Russia and the West to analyse the current state of relations and to map what it might be possible to improve or at least to stabilise, given the stalemate on various fronts. We had one Chinese voice. It would have been good to have more, as the increasingly important role of China as a player in Russia’s relationship with the West was a recurrent theme in the conversation.

Analysis
Both Russia and the West see China as having a strategic plan and an assured place as a great power. In contrast, the West views Russia as a declining power, playing a sometimes cunning but poorly calculated tactical hand. Russia, on the other hand, sees western policies in the Middle East and Eastern Europe alike, as unsustainable and dangerous; often implemented without full thought to the risks; and certainly without considering Russia’s red line interests in the near abroad and the threat of Islamic extremism. To President Putin, the West is suffering an ideological and social malaise at home, losing meaning and direction. He is ready to stir the pot using cyber and other tools to his own advantage. At the same time, most of Ukraine is now permanently part of the West and F16s in Estonia would be three to four minutes from St Petersburg. Russia is cocky on the outside, threatened and beleaguered on the inside.

It was observed that great power relations are not only complicated but also often tragic. Russia is not effectively integrated into a great power system. This is because the United States no longer sees Russia, at two percent of global GDP, as opposed to the USSR’s 19 percent, as a great power but a regional one. This is a measure and status that President Putin, and many Russians, cannot accept. Russians appear willing to pay a significant tax for great power status. Putin, a foreign policy aficionado, defines this for them as the ability to set the international agenda; to force inclusion in decision making; and to be able to pick and choose which international rules to obey and which to ignore. Knowing he can’t win the GDP game, he sets it aside. Russia’s ambitions may outstrip its resources but they do not exceed its stubbornness and extraordinary resilience. Sanctions are hurting but not necessarily working.

There was close to consensus that, as long as Putin is in power, Russia is more stable than it looks. The system is entrenched and, after three terms, perfectly designed to deliver the results it delivers. Bold economic reform is needed but very unlikely. The capacity for dynamic innovation is weak but growth of around two percent per annum should be sufficient to contain dissatisfaction. Many young talented Russians will continue to seek their future abroad but the demographic time bomb is ticking slower. There is concern at home as well as abroad over excessive defence spending and this is being reined back a little, with no destroyers for example in the Navy’s plans. The next six years are likely to be different than the past six, with more consolidation and fewer adventures abroad. Russia is already overstretched and the zones of influence it has achieved amount to little more than Eastern Ukraine in Europe and a shattered Syria in the Middle East. The latter is seen as the more successful policy.

Nonetheless, Putin is well set for his fourth term. Although the laws of economics will have their say eventually and may bring about change, there is time yet. The focus for the fourth term is likely to be transition to the new Putin. In Russia, it was observed, it is the people that are the institutions. Putin will need to set in place, as Yeltsin did, a successor who will keep him safe in retirement, unless he chooses to soldier on somehow into autocratic old age.

All this means that we have to be realistic. It is most likely that for many years to come we will be dealing with the Russia we have now. Change could come suddenly as regimes based on people rather than institutions are ultimately as fragile as the human beings that command them. But that aspect of the future is impossible to predict. It’s not all bad though. Putin is not an ideologue. His self-proclaimed role as the last Christian emperor is one of his plays but he is equally at home commemorating the strength of the USSR with crazy old leftists from around the world. It is the status and attention that matter most. A grand deal is both unlikely and unwise given the betrayals and loss of credibility it would demand of the West. But Putin is pragmatic and transactional and can compartmentalise. We need to regain this habit ourselves if we are to make incremental progress and to keep an unstable situation under control.

We returned again and again to Russia’s relationship with China. Was there depth and permanence in Russia’s shift towards China? Did it amount to strategy or was it just tactics, given Russia’s deep sense of itself as in the end a European power? Could Russia really be enthusiastic for a future as China’s junior partner? Against these doubts were set the growing importance of trade with China – already Russia’s biggest trading partner – and Chinese investment in the East. There was also the shared Communist heritage and shared views on the benefits of authoritarian as opposed to liberal democratic rule. Some saw a more strategic pivot, a recognition that China would grow more and more influential combined with that sense that the West’s model was played out and not quite so beneficial in an era of rapid technological change. What choice does Russia really have apart from partnership with China? There was debate on whether or not the West should really wish for a deterioration in Russian and Chinese relations but consensus that there was nothing but advantage for China in Russia’s shift towards it.

Putin is using the new old playbook – cyber attacks, ambiguous warfare and information operations – to good tactical effect with the West, which has been set off balance and is unsure how to respond. But it is not clear that these short term gains will mature into strategic benefit. There was deep concern in the group that the combination of new tools of influence and attack, like cyber, could undermine and make shaky a decades old approach to nuclear deterrence. The wild card of the DPRK’s nuclear arsenal is another factor increasing uncertainty.

The West continues to fail to remember how deeply both the threat from the Central European plain and the threat of Islamic extremism in the Caucasus are gouged into Russian history and psyche. These, and access to the Black Sea through Crimea, are hard stops in Putin’s political pragmatism. It was countered that Putin for his part forgot that the denuclearisation of Ukraine was a deal and significant win to which Russia had signed up willingly. His problem was not primarily the West’s push East but the corruption and ultimate lack of coherence and values of his rule at home.

Ideas for action and reflections
There were two broad recommendations, not subjects of consensus, but standing above the rest and in slight tension with each other:

We should be realistic because to be too ambitious in design for rapprochement with Russia could be downright dangerous. There is too little alignment of interests. There is too much misunderstanding and too many different interpretations of history. And there are nuclear weapons and a shifting system of deterrence. What we need therefore is a series of processes in train – Track Two talks as well as official negotiations – that can de-escalate tension and mitigate risk. These initiatives need to sustain an appetite for discussion and keep open hotlines for crises. Diplomacy often means containing things that can’t be solved, delaying the outbreak of hostilities, rather than removing the causes. Many of the touch points with Russia are of this nature and need to be handled with care not flair. The language on both sides needs to be toned down to this end. We should forget grand bargains on the global system and we should reject the concept of zones of influence which undermines our values and overplays Russia’s strength, already over extended.

The West needs to regain its confidence, both in its values and in the results they bring on prosperity and power. Its job is not to impose its system and values on others but to make them irresistible by their manifest success at home. We need to define our aims with Russia in a coherent way. Our plans up until 2011 assumed a Russia gradually becoming more like us. Now this seems less likely, what do we actually want and what levers are we willing to use to get there?

Arms control and cyber
Discussions on arms control and modern deterrence (on which Ditchley will hold a conference in early 2019) are urgently needed. We have lost the Cold War habit of keeping such talks going when all around there is trouble. The frameworks also need updating to take account of the impact of new technologies and weapons and their potentially dangerous interaction with the system of nuclear deterrence with its roots and technology from the 1970s. Application and progress on arms control might have broader benefits, building professional relationships and reducing unthinking hostility.

Syria and CT
The big winner in Syria is not Russia but Iran. It is not clear that this is in Russia’s strategic interests. There could also be common ground in containing mass migration through safe zones inside Syria and in selective local humanitarian ceasefires. We might have arrived there from different directions but it looks like there could be some alignment between Russian and western interests, now that ISIS has been geographically defeated and the Syrian opposition no longer poses such an immediate threat to Assad.

There would be a need for CT cooperation on upcoming events like the World Cup in Qatar. This might provide an opportunity to build some bridges. There is a shared interest (albeit with very different methods) in containing Islamic extremism.

Ukraine
Ukraine remains the “big boulder in the road”. Crimea could, and would have to be, shelved indefinitely for there to be any progress. It would join the long list of unsolvable conflicts. There could be no recognition of Russia’s annexation but equally there was no expectation that any Russian government would give it up.

The West should insist on the facts – this was an intervention by Russia in a neighbouring state, not a civil war. But equally the West should recognise that it is conflicted on Ukraine, without a united policy in Europe. We should look for concrete measures on the ground to defuse tensions and reduce violence. Prisoner exchanges could be a good place to start, along with local ceasefires and humanitarian initiatives. President Putin’s proposals for UN involvement might not be workable but they should be discussed and could lead to something. We need to keep the process alive even if the going is tough.

Sanctions
Some argued that sanctions were not working and hurting the wrong parts of society and not the system. They were a substitute for coherent policies rather than an expression of them. Others accepted that sanctions were not a route to a clear destination but argued in response that sanctions had been an inevitable result of Russia’s actions and that doing nothing was hardly an option. Either way, neither Angela Merkel nor the U.S. congress were about to give up on sanctions any time soon. Like Putin, they were here for the foreseeable future and a feature of the landscape that had to be traversed. The focus should be on keeping things from getting worse which they easily could – for example, lethal aid to Ukraine was back on the table in Congress in Washington.

The chance of President Trump being able to do anything on Russia other than implement existing policy was seen as remote, given allegations and investigations that cut down his room for manoeuvre on Russia to close to zero.

This Note reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.

CHAIR: Ambassador William J. Burns
President, Carnegie Endowment for International Peace (2015-). Formerly: U.S. Diplomatic Service (1981-2014): Deputy Secretary of State; Under-Secretary of State for Political Affairs (2008-11); Ambassador to Russia (2005-08); Assistant Secretary of State for Near Eastern affairs (2001-05); Ambassador to Jordan (1998-2001); Executive Secretary of the U.S. Department of State; Special Assistant to former Secretaries of State Warren Christopher and Madeleine Albright; Special Assistant to the President and Senior Director for Near East and South Asian affairs, National Security Council.

Professor Paul Robinson
Full Professor, Public and International Affairs, Faculty of Social Sciences, University of Ottawa (2006-); author, numerous books on Russia. Formerly: Interim Vice-Dean of Graduate Studies, University of Ottawa (2015); Deputy Director, Centre for Security Studies and Acting Director, Institute of Applied Ethics, University of Hull (2000-06); media research executive, Moscow (1995).

Ambassador Sylvie Bermann
French Diplomatic Service (1979-): Ambassador of France to the Russian Federation (2017-). Formerly: Ambassador to the United Kingdom (2014-17); Ambassador to the People's Republic of China (2011-14); Director, United Nations and International Organisations Directorate, Ministry of Foreign Affairs (MFA) (2005-11); Ambassador to the Western European Union and European Union's Political and Security Committee, Brussels (2002-05); Head, Common Foreign and Security Policy Department, Political and Security Affairs Directorate, MFA (1996-2002).

Professor Alexander Dynkin
President, Primakov National Research Institute of World Economy and International Relations (IMEMO), Russian Academy of Sciences, Moscow (2006-); member, Presidium, Presidential Council for Science and Education; member, Presidium, Russian Academy of Sciences; member, Scientific Council, Security Council of the Russian Federation; member, Russian Foreign Minister's Scientific Council; Chairman and Founder, Primakov Readings. Formerly: Economic Advisor to the Chairman of the Government of the Russian Federation (1998-99).

Ambassador Andrey I. Kolosovskiy
Assistant General Counsel and Director for Corporate, External and Legal Affairs for Russia, Microsoft Inc., Moscow (2009-). Formerly: Private Consulting (2002-09); Vice President and Deputy Chairman of the Board of Directors, Media-Most (1997-2001); Diplomatic Service of the Russian Federation, formerly Soviet Union (1978-97): Permanent Representative of the Russian Federation to the United Nations Office and other international organizations in Geneva (1993-97).

Mr Oleg Goshchansky
Chairman and Managing Partner, KPMG Russia (2012-); member, KPMG's Global Board and Global Council; member, Board of KPMG in Europe, the Middle East and Africa; member of the Board, Russian Union of Entrepreneurs and Industrialists (RSPP); member, Strategic Council on Investments in New Industries, Ministry of Industry and Trade of the Russian Federation; Supervisory Board Member, The National Coordination Council for Development of Economic Relationships with the Asia-Pacific Region; member, U.S.-Russia Business Council Board.
Mr Ruslan Pukhov
Director, Centre for Analysis of Strategies and Technologies, Moscow; Public Council member, Russian Ministry of Defence; Executive Director, Russian Armorers Union.

UNITED KINGDOM

Professor Roy Allison
Professor of Russian and Eurasian International Relations and Director, Russian and Eurasian Studies Centre, St. Antony's College, University of Oxford (2015-). Formerly: Reader in International Relations, London School of Economics (2009-11); Head, Russia and Eurasia Programme, The Royal Institute of International Relations (Chatham House) (1993-2005); Senior Research Fellow, Centre for International Studies, University of Oxford (2001-05); Senior Lecturer in Russian International Security Policy, University of Birmingham (1992-99); Visiting Scholar, Moscow State University and Brookings Institution.

Dr Michael Denison
Group Political Adviser, BP plc. London (2013-). Formerly: Global Head of Research, Control Risks (2009-13); Associate Fellow, Elliott School of International Relations, George Washington University (2009-13); Special Adviser to UK Foreign Secretary (2008-09); Lecturer in International Security, University of Leeds and University of St Andrews (2001-08); Associate Fellow, Chatham House (2005-08).

Mr Philip Stephens
Chief Political Commentator, Associate Editor and member of the Editorial Board, Financial Times; Richard von Weizsacker Fellow, Robert Bosch Foundation, Berlin; steering group member, Anglo-French Colloque; advisory board member, Institute for Public Policy Research; recipient, David Watt prize for Outstanding Political Journalism; Political Journalist of the Year (UK Political Studies Association) and Political Journalist of the Year (British Press Awards). A Governor and Vice-Chair of the Council of Management, The Ditchley Foundation.

UNITED STATES OF AMERICA

Mr Thomas Graham
Managing Director, Kissinger Associates Inc. Formerly: Special Assistant to the President and Senior Director for Russia, National Security Council (2004-07); Director for Russian Affairs, National Security Council (2002-04); Associate Director, Policy Planning Staff, U.S. Department of State (2001-02); Senior Associate, Russia/Eurasia Program, Carnegie Endowment for International Peace (1998-2001); U.S. Diplomatic Service (1984-98): Head, Political/Internal Unit; Acting Political Counselor, U.S. Embassy, Moscow.

Mr Thomas Pickering
Vice Chairman, Hills and Company, Washington, DC; Consultant, The Boeing Company. Formerly: Senior Vice-President International Relations and Member, Executive Council, The Boeing Company (2001-06); Under-Secretary of State for Political Affairs, U.S. Department of State (1997-2000); President, Eurasia Foundation (1996-97); Ambassador of the U.S. to Russian Federation (1993-96), to India (1992-93); Permanent Representative to the United Nations, New York (1989-92); Ambassador to Israel (1985-88), to El Salvador (1983-85), to Nigeria (1981-83), to Jordan (1974-78). A Member of the Board of Directors, The American Ditchley Foundation.

Mr Daniel A. Russell
President & CEO, U.S.-Russia Business Council, Washington, DC. (2013-). Formerly: U.S. Diplomatic Service (1983-2013): Deputy Assistant Secretary of State responsible for relations with Russia, Ukraine, Moldova and Belarus, and for international security and arms control issues, Bureau of European and Eurasian Affairs; led creation of U.S.-Russia Presidential Commission; Chief of Staff to Under Secretary of State for Political Affairs (2008-09); Deputy Chief of Mission, U.S. Embassy, Moscow (2005-08); Deputy Chief of Mission, U.S. Embassy, Kazakhstan (2000-03); Director,
Office of Russian Affairs.

Mr David Schwimmer
Partner, Global Head of Metals and Mining, and Head of Market Structure, Goldman, Sachs & Co. (1998-); Board of Directors, Center for a New American Security. Formerly: Co-Chief Executive Officer, Goldman, Sachs Russia/CIS and Head of Investment Banking for Russia and Eastern Europe; Chief of Staff to then-President and Chief Operating Officer Lloyd Blankfein. A member of the Board of Directors of the American Ditchley Foundation.
The Hon. Strobe Talbott
Senior Fellow, Foreign Policy Program, The Brookings Institution. Formerly: President, The Brookings Institution, Washington, DC (2002-17); Founding Director, The Yale Center for the Study of Globalization (2001-02); Deputy Secretary of State, U.S. Department of State (1994-2001); Ambassador-at-Large and Special Adviser to the Secretary of State on the New Independent States (1993-94). Chairman, The American Ditchley Foundation.